The heat loss through the exterior walls of a processing plant is estimated to cost the owner $3,000 next year. A salesman from Super fiber, Inc. claims he can reduce the heat loss by 80% with the installation of $15,000 of Super fiber now. If the cost of heat loss rises by $200 per year, after next year , and the owner plans to keep the building ten more years, what is his rate of return, neglecting depreciation and taxes?

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A:

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A: Please find the answers to the above questions below:

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A:

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.